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Bargain hunters had reason to rejoice this Christmas, but store owners had less cause for celebrating.

Retailers rang up mostly respectable holiday sales gains, but many relied on profit-eating discounts to woo customers.Kurt Barnard, publisher of the newsletter Retail Marketing Report, said Tuesday that judging by the evidence so far, his prediction of a 5 percent increase in holiday sales this year looks accurate.

To eke out the estimated increase, which falls short of 1988's 7 percent rise above the previous year, retailers had to accept lower prices that pinched their profits.

"I think the consumer had a very merry Christmas, and I'm not so sure that the retailers did from a profit point of view," said analyst Linda R. Morris of PNC Financial Corp. in Philadelphia.

Many stores still are stuck with too much inventory, so post-Christmas price-cutting is expected to be more extensive than normal, Barnard said.

Holiday shoppers lived up to their reputation as procrastinators and didn't spend heavily until the final days before Christmas, helping to salvage the season for some retailers. Last year, a belated surge boosted business and more than made up for earlier weakness.

Not every retailer had to resort to unusually intense price-cutting. Dayton Hudson Corp., which operates the Target discount chain and the Dayton Hudson and Mervyn's department stores, said business this year was slightly less promotional than in 1988. However, sales were good.

"We are very pleased with the results," said Kenneth A. Macke, chairman and chief executive officer of the Minneapolis-based retailer. "We continue to expect a strong fourth quarter."

Deep discounts, giveaways and other promotions have been fiercest in the most competitive areas of the country.

Stores emphasizing clothing indicated they enjoyed better results than general merchants, continuing a yearlong pattern. Frigid weather in many parts of the country sent shoppers searching for overcoats, sweaters, scarves and similar cold-weather garb, retailers said.

J.C. Penney Co. Inc., which does most of its business in clothing, finished the season strongly, said spokesman Duncan Muir. He said double-digit sales gains occurred at many stores around the country run by the Texas-based retailer.

The nation's biggest retailer, Sears, Roebuck and Co., also benefited from a late surge in shopping, spokesman Ernest Arms said. But overall Sears holiday sales probably will turn out to be about the same as last year, when the retailer reported a 12.1 percent jump in sales over 1987.

Most major retailers will issue reports Jan. 4 on their Christmas sales.